The Bear Cave #277

New Activist Reports, Recent Resignations, and Tweets of the Week

Jun 08, 2025

Welcome to The Bear Cave! Our last premium articles were “Problems at Two Paper Products Companies” and “More Problems at KinderCare (KLC)” and our next special investigation comes out Thursday, June 19.

New Activist Reports

Morpheus Research published on Abacus Global Management (NASDAQ: ABL — $586 million), a life settlements company. Morpheus said its 3-month investigation included “interviews with 33 industry experts & former [Abacus] employees” and alleged that Abacus engaged in “a scheme to systematically overvalue its assets, reminiscent of past life settlements blowups.” In particular, Morpheus alleged that Abacus has an inappropriately close relationship with a life expectancy data provider, Lapetus Solutions, which provides Abacus with low life expectancy predictions that inflate the values of Abacus’ life settlements. Morpheus highlighted that Abacus has invested $1 million in Lapetus and wrote, in part,

“Abacus’ co-founders have a litany of red flags in their pasts that include destroying records, involvement in bid rigging schemes, selling fraudulently procured life insurance policies, and endorsing notorious fund blowups… When Abacus Settlements applied for a life settlement providers license, the Florida insurance regulator initially denied the application, saying Abacus was not ‘worthy of a license’ due to a ‘lack of trustworthiness of the principals… which cannot be cured.’”

In response, Abacus said the Morpheus article was “a copy and paste of fiction from our largest competitor, who has been shopping this story for months.” Abacus also “authorized a new $20 million share repurchase program” and highlighted recent insider buying.

New activist Pelican Way Research published a 49-slide presentation on Yalla Group (NYSE: YALA — $1.09 billion), an audio-based social network popular in the Middle East. Pelican Way found that “Yalla’s reported revenue metrics and reported downloads sharply contrast with trusted third-party sources and our proprietary calculations” and alleged Yalla’s app reviews “exhibit signs of extreme artificial activity.”

Akram’s Razor, and Swan Street Research previously alleged similar issues of inflated user metrics against Yalla in May 2021.

New activist Fugazi Research published on Sharplink Gaming (NASDAQ: SBET — $2.46 billion), a gaming marketing company that recently pivoted to buying Ethereum. Fugazi raised concerns about the validity of the company’s Ethereum holdings and highlighted that “no Ethereum assets appear on the company’s balance sheet, no wallet address has been disclosed, and no independent auditor or custodian has verified [the company’s claims].”

Recent Resignations

Notable executive departures disclosed in the past week include:

CFO of Hallador Energy (NASDAQ: HNRG — $744 million) resigned “to pursue other opportunities” after a little over one year. In May 2024, the company acknowledged a “phone conversation with our legal counsel” and the SEC Division of Corporation Finance. The company’s subsequent June 2024 comment letter response concerning its power plant accounting was signed by the company’s now-departing CFO. Hallador is audited by Grant Thornton.
CFO of BigBear.ai Holdings (NYSE: BBAI — $1.12 billion) resigned with immediate effect “to pursue other opportunities” after three years. In March, Iceberg Research alleged “many of BBAI’s contract announcements are highly misleading if not outright fraudulent.” The AI analytics and consulting company is audited by Grant Thornton.
CFO of LiveWire Group (NYSE: LVWR — $1.22 billion) resigned after three years for another opportunity outside the company.” In February 2025, the company switched auditors from Ernst & Young to KPMG, and in June 2023 the company’s Chief Accounting Officer resigned after a little over one year. The electric motorcycle company is down ~40% since its September 2021 SPAC merger after being spun out of Harley-Davidson.
Mr. Jay H. Shah, board member of Braemar Hotels & Resorts (NYSE: BHR — $162 million), resigned with immediate effect after just eight months. The Bear Cave previously included Braemar on our list of 100 Long-Term Underperformers, citing “allegations of unethical management behavior and enrichment at the expense of shareholders.”
Four board members of HF Foods Group (NASDAQ: HFFG — $195 million), Ms. Lisa Lim, Ms. Charlotte Westfall, Mr. Xiao Mou “Peter” Zhang, and Dr. Yujie Wang, all departed the board this week. Ms. Lim and Ms. Westfall announced their resignations this week, while Mr. Zhang and Dr. Wang disclosed they were not seeking board re-election in April. The company is now overseen by a four-person board with only one member who has served longer than one week.
In March 2020, Hindenburg Research alleged the company was backed by pump-and-dump artists and “transacted with at least 43 separate related-party entities.” The company is audited by BDO USA, has had seven different CFOs in the last seven years, and has fallen ~60% since its August 2018 SPAC merger. In December 2024 and March 2025, the company responded to SEC comment letters where the SEC wrote, in part,
“We note your disclosure on page 49 in note 1 to the financial statements that accounts at banks with an aggregate excess of the amount of outstanding checks over the cash balances are included in ‘checks issued not presented for payment’ in current liabilities in the consolidated balance sheets… We note that the change in the balance of ‘checks issued not presented for payment’ is presented within the financing activities section of your consolidated statements of cash flows. Please tell us your basis for presenting this within financing activities rather than operating activities.” (Emphasis ours)

Data for this section is provided by VerityData from VerityPlatform.com

News of the Week

“Idea Brunch with Nicholas Marshi of BDC Investment Advisors” (Sunday’s Idea Brunch)

BDC expert Nicholas Marshi shares the ins and outs of BDC investing from his 20-year career investing in BDCs.

“The Games Signet Plays” (Herb Greenberg)

“Which gets us to where we are today – or at least with the just-reported Q1, when investors cheered an 8% rise in AUR vs. 5% the prior quarter. Fine and dandy, until you read the fine print and see that the definition of AUR changed... again!”